An efficient logistic system does not depend on the size of your company or business. It is the same for small and large companies as well as for those who own a small business and those who run a massive corporation. We as a 3pl company, aim to provide you with the best services.
To put it simply: An efficient logistic system is one that meets your company’s requirements, not others’. If you do not manage to create such a system soon, it will be difficult to grow your business because goods will constantly get lost or damaged and there will be no time to produce new items due to a huge backlog of orders. On the other hand, using external logistic providers may result in customer dissatisfaction if their personal data gets leaked or they must wait more than 2 days for receiving purchased goods. That’s why I decided to write this article on what an efficient logistic system is and how it can be created.
Efficient logistic system: why?
When we speak about efficient logistics, we should mention supply chain management as well. To put it simply, the supply chain is a sequence of steps (supply chain stages) that lead to the desired result such as satisfying your customer’s needs and expectations with your exceptional logistics service. The whole idea behind this concept is to control the flow of goods from their origin to the destination point. It does not matter if those goods are physical or digital – they may represent any type of information transmitted online: services, databases, and so on and so forth. Anyways, regardless of the nature of the goods, you need to create a perfect infrastructure while shipping seafood or other goods that will allow you to communicate with both suppliers and buyers without any problems whatsoever.
The Logistics systems are a complex set of procedures, infrastructure, and human capital that enable businesses to synchronize how they communicate, move their products around the world, and finally bring them to the end consumer. Supply chains are profitable only when they are efficient, minimizing costs while maximizing customer value. The better these logistics systems are in terms of technology, planning, and execution – the more competitive will be your firm in its niche market.
- The transportation costs should account for roughly half of your product’s total cost. They comprise many different categories including labor, fuel, paperwork (insurance, etc.), and vehicle maintenance among others. By improving just one link at a time in your supply chain you can save money on each part of this process thus maximizing overall transportation efficiency.
- The more your products are moved across the country or around the world, the bigger the impact of letting things go wrong in your supply chain. There are many ways to improve this aspect of production either by using computerized systems, better planning methods, etc.
- While there is software for almost anything these days, an efficient logistics system relies not solely on technology but also on human capital. Shippers should learn how to properly plan their routes, know where they are going and take into account possible malfunctions when organizing the transportation process. If you have a complex supply chain with multiple partners – working closely with them can yield great results in terms of pooling resources together thus cutting costs related to the transportation extra mile makes all the difference.
- Letting non-core activities (like transportation) be handled by other companies might seem like an efficient idea but it is not. Relying on external partners for cooperation gives them greater power in negotiating prices or deciding how your products are moved across the country which, as you may expect, affects your bottom line greatly.
- While reducing transportation costs will always bring a significant impact to end result; there are many other aspects that should not be ignored when building an efficient logistics system. From customs officials to warehousing and all the way to final sale – every part of your supply chain can benefit from proper planning and execution making it easier for you to build a competitive market niche.
Bottom line: A good logistics system does not rely solely on technology but also on human capital.
Humans are the ones who should be making all the key decisions in your supply chain, computers can only do so much after all.
